Understanding Volume-Level Adjustments for Procurement (Release 9.2 Update)

Tutorial: Click here to view a recording on how to set up and process automated calculations of volume-level price adjustments for purchase orders.

Repricing enables you to apply volume-level adjustments during purchase order entry for a product or product group. The discount offered by the supplier is based on the volume a customer orders over a period of time, in multiple orders. The discount can be based on amount, quantity, or weight. You can set up a volume-incentive adjustment based on single rate pricing or sliding rate pricing.

When you create a purchase order, the JD Edwards EnterpriseOne Advanced Pricing system uses the previous order volumes in combination with the current order volume to apply the price adjustment to the order. The adjustment definition and adjustment details determine the level break to use for advanced pricing.

To set up volume-level adjustment, you define the price adjustment definition, create adjustment detail records, and then add the adjustment definition to an adjustment schedule. You specify which adjustment schedule to use by associating the schedule with the supplier master record, or by manually entering the schedule when you enter the purchase order. During purchase order entry, when you apply the adjustment, the system updates each item's price with the adjusted price and updates the Rebate Transaction Summary (F4078) table and the Rebate Transaction Detail (F4079) table.

For example, the supplier offers a 10 percent discount on products Item A, Item B, and Item C at a quantity level break of 100. The supplier also provides a 20 percent discount on the same products at a quantity break of 500.

You create a purchase order for Item A, Item B, and Item C.

On the purchase order, you enter the following items and quantities:

Item	Order Quantity	Unit Cost
Item A	50	100
Item B	60	300
Item C	70	200

The total quantity of Item A, Item B, and Item C exceeds 100 and therefore falls within the 100 "From Level" in the price adjustment detail setup. Therefore, when you apply the volume-level adjustment to the order, the system automatically computes a discount of 10 percent on the base unit cost of each item in the order. The adjusted unit cost of each item in the purchase order is now as shown below.

Item	Order Quantity	Unit Cost
Item A	50	90
Item B	60	270
Item C	70	180

Next, you create a new order for the same products with these quantities.

Item	Order Quantity	Unit Cost
Item A	100	100
Item B	100	300
Item C	200	200

The total quantity of Item A, Item B, and Item C equals 400 and falls within the 100 "From Level" in the price adjustment detail setup. But the total of quantities ordered in the previous order and the current order is 580 which falls within the 500 "From Level" adjustment detail. Therefore, when you apply the volume-level adjustment to the order, the system automatically computes a discount of 20 percent on the base unit cost of each item in this order. The adjusted unit cost of each item in the new purchase order is now as shown below.

Item	Order Quantity	Unit Cost
Item A	100	80
Item B	100	240
Item C	200	160

Note: You cannot use volume-level incentives with the Free Goods Catalog program (P4502).

Note: When you update a purchase order that has the volume-level incentive applied, the system does not reprice the order during order update. A warning notifying that the change may result in invalid pricing is displayed. You must run the Re-Apply Volume Level Pricing for Procurement program to update the incentive price adjustment to that order and to the subsequent orders.

You can review accumulations for volume incentives using the Volume Incentive Deal History for Procurement program (P45300). See Using Volume Incentive Inquiry for Procurement.